Live TV Piracy Threat on the Rise

Bulk of issue tied to purpose-built hardware, Sandvine says

Why This Matters

Paid TV pirate services could cost TV providers more than $4 billion in 2017 revenue.

Despite the growth and availability of new, legitimate over-the-top TV offerings, paid pirate TV services have become a growing threat for all video service providers, according to a new study.

Sandvine, a maker of bandwidth management and network intelligence systems, found that 6.5% of homes in North America are accessing illegal live TV services each month, estimating that the filching of that content could cost pay TV providers more than $4 billion in revenue this year.

In a new Global Internet Phenomena report dedicated to the video-piracy trend, Sandvine said the threat comes from illegal services that replicate live TV services for about $10 per month, steeply undercutting the price of legitimate cable and satellite TV offerings. One example is NecroIPTV, a Germany-based company that takes payment for the provisioning of thousands of channels from around the globe.

Sandvine’s study is also fixated on the devices that consumers are using to obtain illegal content. Purpose-built set-top boxes and hardware that embed software that’s solely designed to access pirated TV streams is by far the main vehicle, at about 95%.

Behind that are so-called “fully-loaded” Kodi devices, including PCs and smartphones, that can be modified with unofficial add-ons that are capable of accessing pirate video services. A smaller concern are unofficial apps for Roku devices that can also be made to access illegal pay TV services. And yet another threat are video player apps for smartphones, tablets and PCs that can stream M3U8 files that are popular with pirates. (M3U8 files are plain text files that can be used by players to locate video and audio files.)

In addition to the end user, other components of this growing ecosystem include the box seller (hawking devices configured to access the pirated streams); the unlicensed video provider (which has access to the digital streams or over-the-air TV feeds); and the video hosts (cloud providers who host the live and VOD content and are paid by the unlicensed video provider).

Sandvine also identified four key content categories that appear to be driving the growth of live TV piracy: premium programming, sports, new and international/expatriate content.

These illegal services also expose what Sandvine calls a “phantom bandwidth problem” that can jack up capacity requirements for internet service providers.

While OTT services such as Netflix embed components that will halt streaming when it’s obvious that the service isn’t being watched (that saves internet distribution costs for Netflix, and likewise helps customers keep bandwidth usage in check if they happen to fall asleep during a show or movie), that’s not a big concern for illegal TV services.

“Based on Sandvine’s testing, many of these devices will stream continuously unless the box itself is physically powered off,” contributing to the aforementioned “phantom” issue, the company said.

If a user doesn’t turn off the box that happens to be streaming HD content, then it could easily consume more than a terabyte of data in a month and blow past a data policy set up by the person’s ISP.

Sandvine based its findings on data culled from its work with several North American service providers along with research of TV piracy services.